Labor has left open the prospect of another inquiry into banks, should it win the next election, unless the government expands the scope of the royal commission which it announced under duress on Thursday

In a letter to Treasurer Scott Morrison on Friday, shadow treasurer Chris Bowen said the proposed royal commission into Misconduct in the Banking, Superannuation and Financial Services Industry, to be led by former High Court judge Kenneth Hayne, was neither far reaching enough nor adequately resourced.

"Let me be clear from the outset, if the Turnbull government does not get this right from the start, we will only see a continuation of the financial scandals, lack of justice for victims of financial malfeasance and systemic risks that are contributing to the uncertainty for the financial services sector," he says.

Queensland independent Bob Katter told The Australian Financial Review he was prepared to act sooner and try to muster the votes in Parliament for a commission of inquiry.

While Mr Bowen's letter leaves open the threat of another inquiry should the government's not be deemed comprehensive enough, Queensland independent Bob Katter told The Australian Financial Review he was prepared to act sooner and try to muster the votes in Parliament for a commission of inquiry.

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"If those terms do not meet our requirements I believe and its my understanding that all of the cross benches will vote for a proper inquiry," he said.

Mr Katter said he was worried about the terms of reference in circumstances where there government had resisted calls for an inquiry for 19 months.

"So why have they suddenly changed at the behest of the banks".

It was a move by the Nationals to legislate a commission of inquiry, which is a royal commission but established by, and reportable to, the Parliament, that forced the government to capitulate on Thursday when the Nationals secured the numbers in both houses for their bill.

Treasurer Scott Morrison denied the government was pursuing an idealogical agenda against union-backed superannuation funds and rejected suggestions that including the super sector would divert the commission's attention away from bad behaviour by the banks.

The government dragged the $2.5 trillion super industry into the probe, with the terms of reference suggesting industry schemes in particularly would be targeted.

The draft terms of reference require the commission to look at use of fund members' money "for any purpose that does not meet community standards and expectations, or is otherwise not in the best interests of members".

It is understood that this term does not refer to the way in which member savings are allocated across different asset classes, but could take in spending of members' money on services such as marketing, sponsorships and seminars.

Among the types of spending that could be canvassed by the commission are those made by super funds to unions to cover the employment costs of union staff.

First Super has said the co-ordination services were subject to internal and external audit and the regulator had been notified, but the Turnbull government is concerned that, if left unchecked, such arrangements could lead to super funds subsidising union payrolls.

The banking royal commission may also consider relevant union misconduct of industry fund directors, with the terms of reference referring to "the nature, extent and effect of misconduct by a financial services entity", including by its directors.

The term may be broad enough to cover allegations against the head of the $8 billion local government fund Vision Super, Brian Parkinson.

Mr Parkinson is facing claims that during his time as secretary of the Australian Services Union's Victorian services branch he assigned union maintenance work to a company that was secretly run by his wife, a hairdresser.

The union, who nominated Mr Parkinson to the fund's board, is preparing to put the claims to him for response after he agreed to stand aside as chairman last week pending resolution of the issue.

Mr Parkinson has not returned requests for comment but last month denied knowledge of the company to the Financial Review before hanging up.

Mr Bowen welcomed the appointment of Mr Hayne but said given the tight time frame of 12 months, other commissioners should be appointed to help the work load.

He demanded that the terms of reference be expanded to examine the adequacy of the regulatory regime, which is specifically ruled out by the Terms of reference. Mr Bowen announced in July Labor's royal commission would be expanded to look at the regulatory architects, much as a Financial System Inquiry by David Murray had done.

He said the victims groups must be consulted so individuals could tell their stories and, in ths vein, the conduct of liquidators should also be looked at.

Labor also has "serious concerns about the narrow focus on industry superannuation funds".

"Australians will be rightly concerned if such a narrow focus into industry funds simply means fulfilling a LIberal party agenda agains industry funds and the union movement."

Industry Super Chairman and former Liberal MP Peter Collins called this reference a "politically driven agenda" and an ideological pursuit against industry super funds.

Mr Morrison said he was "wrong and overreacting" and the pursuit of super funds would ot divert the commission from the main game of financial scandals and bad bank bad behaviour.